Auto insurance is an expense that most people pay each month. If you drive or own a vehicle, you need this insurance type. One thing to know is that you can choose the coverage types you need for your policy. Some people pay more to have full coverage insurance on their vehicles, but others get by with liability-only policies. When is a liability-only policy a good idea? Here are some factors to consider to understand when liability only is the right choice.
You Have the Title to Your Car
When you owe money on a vehicle through an auto loan, you will not have the option of a liability-only policy. Lenders often will not allow this option. But, if you pay off your car, you will receive the title to it and will not have a lender. Therefore, you can drop your coverage to liability-only if you have your car title. As long as you do not have a lender involved with the vehicle, you are free to choose the types of coverage you want.
Your Car Is Not Worth Much
Secondly, choosing a liability-only policy is often the best option when your vehicle is not worth a lot of money. For example, if you own a car that is worth around $2,000, would it make sense to have full coverage? After all, if you have a $500 deductible and total the car, the insurance company might compensate you with $1,500 at most. Having full coverage does not make a lot of sense when a car's value is low.
You Need a Way to Cut Your Auto Insurance Premiums
Finally, if you have the title to your car, you can choose a liability-only policy to save money. If you desperately need a way to reduce your monthly expenses, you can save a lot by dropping to a liability-only policy. You can ask an insurance agent what the price differences would be by doing this before deciding what to do.
If you own a car that you do not drive, you might want to keep insurance on it. If so, you will not need liability, though, as this protects you when you encounter accidents with other vehicles. You can ask your agent what type of coverage to have on a parked car you own but do not use. Contact an insurance agent to learn more about auto insurance options, premiums, and ways to save money.
Share4 February 2021
About a year ago, I started thinking more seriously about choosing different insurance. I was focusing on all of the different aspects of insurance, and it was really interesting to me to see how much I could save by switching services. It was a lot to process, but before I knew it, I was able to completely overhaul my insurance coverage, and it made a tremendous amount of difference for me. This blog is here to help other people to know what to look for in insurance coverage so that they can enjoy a happier tomorrow. Check out this blog for more information.